Rwanda's housing sector faces imbalanced growth:
The city of Kigali recently unveiled its report on the existing relationship between the demand of house units and the available supply capacity in the sector. The city's study revealed that nearly 50% of the available houses are in poor condition to harbor its dwellers, but how long can this situation endure?
In a bid to capture what is happening on the policy level, The Independent's Matthew Rwahigi interviewed Ms. Esther Mutamba, the Director General of the Rwanda Housing Authority (RHA) and below are the excerpts of the interview.
How can you describe Rwanda's housing sector currently?
The basic thing that I can say about Rwanda's housing sector is that it is still disorganized and poorly coordinated. There are some important regulations that we are awaiting to be functional, while many others that are available have not yet been implemented to full capacity like the condominium law; which allows people to live in apartments each fully owning a part has not been exploited so far.
But also in a descriptive manner, our housing sector's growth is one-sided, growing only on the high end --which has the well-to-do citizens--and houses have been developed a lot in the past for this particular section while the poor are continuously becoming houseless. Most of the houses that real estate developers construct today cannot be affordable to more than 80% of the population.
What do you mean when you say it is still disorganized? Is it a failure of duty for RHA?
No we are doing quite a lot and believe that the sector will soon get better. The disorganization is to mean that there is still an ego issue where people seem to find pleasure in constructing housing on their own; everyone wants to construct their house individually. The end result is having disorganized and disharmonized house development and ends up being so costing to the country's growth.
The disadvantage in this structure of house development is also reaching to the developer although some seem not to see the repercussions. For a prospective house owner, it becomes very costing for you to develop your house than buy an already developed one from a real estate developer.
From a perspective of someone who is renting and wants to construct a house, there is a risk of double payment; you are paying rent and at the same time have taken up a mortgage loan to construct. This simply implies that you are paying twice for your shelter. Different, if you took the mortgage to buy an already developed house, you pay the house and immediately move in without having to pay rent and the mortgage concurrently.
You said available houses are not affordable to Rwandans. What does affordability mean in this case?
Affordable housing is meant to be costing less than 30% of one's monthly income and it is clear that most Rwandans mainly in urban areas despite living in houses of bad conditions, they pay a lot and a better housing is still not affordable for many.
In the city of Kigali alone, more than 12% of the residents are in the section that still needs social support in order for them to be able to acquire houses. Although we are carrying out a study to quantify the house demand countrywide, the possibility is that many need government support for them to acquire suitable shelter.
Does it necessarily mean that the government needs to build houses for the people because they cannot do it on their own?
It seems like so on the outlook but the support needed is less than having to seek funds to build houses; for instance we need to seek cheaper house construction technology that can enable developers to construct cheap but good quality houses.
In seeking cheap technology, we are focusing on cheap housing materials. Having very costly materials is what makes construction expensive so in a bid to bring the costs down, we started mapping all those materials that are available in the country starting with Kamonyi district as a pilot. We have so far finished mapping all the materials that can be used for construction that are available in the district and this will be followed by doing the same in five more districts before the end of the current financial year.
After mapping; we quantity the available materials, test them to establish their quality and then do research in order to identify how they can be best mixed in order to get better quality materials for the construction industry. After establishing all this, we will give the results to the private sector to replicate and also build capacities of the players that will evolve and this is going to be through soon.
Financial constraints bar many from acquiring quality houses, how are you addressing it?
Truth be told, a few of us construct using personal funds but rather it is through mortgages from financial institutions. However the challenge is that they also target high income end and this often excludes low income groups which dominate our population to address the challenge, we are now advocating for housing cooperatives in order for the bankers to be able to finance a group than individuals.
Also this will make developing low cost housing profitable for the private sector since they will be able to benefit from the economies of scale in constructing for a big and ready market. We are already sensitizing civil servants and the wave will soon spread to the private sector.
Private sector accuses you of not giving enough support, like how did you overlook while government increased tax on construction materials?
I agree that importing construction materials is becoming very expensive but it is an advantage if looked at through another lens; this move will boost local materials consumption but also creating a room to encourage creation of plants that can produce the required materials to come into the country.
Also in reality, people who are complaining about the increase are just crying foul because those that import construction materials are the well-to-dos and can indeed afford the cost. The government's big challenge is to get more funds in order to be able to take care of those that do not have the potential to construct houses even with local materials.
How does RHA work with other public institutions and the private sector in the housing sector?
Housing cross cuts through many other sections of the economy including the financial sector and the manufacturing industry among others. In order to achieve good coordination of the sector, we have regular meetings with the government, the private sector and involved parties so as to take collective moves. Before any of the parties involved makes changes that can impact the housing sector for instance, we are always informed and analyze the proposed change.
What is the way forward to develop a better housing sector?
What we are looking forward to is developing an organized sector that is compliant to the available standards and regulations and what this calls for is advocating to the private sector to engage in developing estates instead of single houses in order to achieve the collective goal.
The definition for low, middle or high cost housing that we want to base upon is supposed to be in terms of size and not quality of the building materials. At present, people judge the cost of the house by the materials used, and the end result is that the poor end up having under quality houses. Through availing cheaper housing material technologies, we expect that the difference cost is going to become size and not quality.
Also we have started having district one stop centers, housing engineers, urban planners and land officials among others. This intends to ease the regulatory procedures for the real estate developers in order to simplify acquiring required documents.